BPA Makes Rule Changes

In a letter to its membership this afternoon, BPA announced a number of rule amendments. Here's the letter:

Dear BPA Worldwide Member:

Below, we have summarized new rule amendments passed by BPA’s Board of Directors at their May 2009 meeting.

Unless otherwise specified, all changes are effective immediately.

The Rule Amendments/New Rules may be accessed through the “Rules” link on the BPA home page, or by clicking here.

We will also post this summary to the BPA blog shortly for your comments and questions.

Or, if you prefer, please contact your BPA Member Relations Manager, or any of our audit staff, if you have questions. MRM contacts can be found on the BPA website.

Board Actions Applying to Business Publications and Consumer Magazines

Print to electronic conversion. In a nod toward media owners’ continued migration to digital platforms, the board voted to allow media owners the option of converting request subscriptions from print to electronic format if proper advance notification and an opt-out are provided to the subscriber.
Non-requested electronic editions. Following months of discussion and debate among publishers, advertisers and media buyers, the board reaffirmed that to be considered “qualified” circulation an electronic edition must be requested; however, the board also voted to allow the reporting of non-request electronic editions as “non-qualified” circulation on circulation statements and audit reports provided the recipients meet the publication’s stated Field Served and Definition of Recipient Qualifications parameters. These demographics must be reported in the Additional Data paragraph of the statement. (Without the demographic information, the electronic edition may not be claimed on the statement.)

Interactive rules. The board approved new rules for BPA’s Interactive Audit product line, which provides audited web traffic data to its print and events members at no additional cost. The rules were developed in concert with IAB Audience Reach Measurement Guidelines. Effective with the December 2009 cycle, media owners reporting “live” data in BPA’s Interactive tool will now have the traffic data on circulation statements and audit reports.

Personal Direct Request. Recognizing a request to receive a subscription may come from a subscriber’s spouse or authorized personal assistant, the board voted to rename the “Personal direct request from the recipient” source to “Direct Request” within paragraphs B*3b and C*5 on circulation statements and audit reports.

Association Request. Under current BPA rules, B3b/C5 source reporting of subscriptions requested by an association executive for their members is categorized under “association rosters and directories.” The subscriptions do not count as “company request” and certainly not “Direct Request”. The U.S. Postal Service does not count these copies as “request” either.

The BPA rule for company request states, “Questionnaires or letters on a company letterhead from firms, including franchises, requesting copies of a publication for employees identified by name, title and/or function may be reported as written request from recipient's company.” Since the association is not the employer of the individual, BPA does not report requests by association executives for their members in this category.

To disclose the difference between those media owners who obtain an association roster or directory and send copies versus a publisher who cultivates a relationship with an association to the point of generating a request from the executive, the board voted to allow media owners to disclose the executive director’s request in an “Additional Data” table footnote on the circulation statement.

Projecting B3b/C5 and B3c on merged publications. In 2006 the BPA board approved amending rules to allow publishers to project paragraph 3b and 3c for Business, and paragraph 5 for Consumer, if the circulation decreased by any amount from the previous audit analysis issue. This change was made to help publishers react quickly to the changing dynamics of the publishing environment. At the time they reaffirmed maintaining the 10% increase threshold because they felt an increase of 10% or more was a substantial change to circulation, which should require the reporting of actual figures.

Recently, BPA has seen an increase in merged publications. It is not uncommon that the circulation of the surviving publication increases by more than 10% from the previous audit issue. This is creating a hardship as the publisher is not in a position to report actual figures on the interim issue from each of the merged publications.

The board voted to give media owners the option of reporting actual figures, post merger, when the increase is 10% or greater or omitting those paragraphs for the interim issue, with the omission due to the merger disclosed through a footnote on the statement.

Renew until forbid. The current BPA rules provide guidance for reporting “renew until forbid” subscriptions. In such a program, the subscriber provides a credit card and billing information with the initial order and gives permission to the publisher to renew the subscription, using the same credit card, until the subscriber forbids. Renew until forbid subscriptions are typically sold using a one-year term/interval. Some publishers are now charging subscribers on a monthly basis and this is creating a challenge for reporting paragraph B5/C3a, Total New and Renewed Qualified Paid Subscriptions Order/Sold for the Period.

For those cases in which publishers sell evergreen renew until forbid subscriptions without any renewal notification of a fixed term, the board voted to create a new category, “perpetual subscriptions,” in paragraph B3a/C5. Those publishers selling renew until forbid subscriptions with an annual “bridge letter” renewing the subscription may continue to report by term.

International arrears. A media owner recently expressed concern about the amount of time the BPA rules allow for arrears when a subscription is sold to a subscriber outside the country of the magazine or publication. The media owner noted there are many time and logistical challenges when dealing with subscribers outside their country and BPA’s current arrears rule of three months does not provide enough time to effectively market the renewal.

The board voted to extend the arrears period for media owner’s international subscriptions from three to six months.

Board Actions Applying to Newspapers Only

EMEA newspaper reporting cycles. BPA was informed by newspaper publishers in Europe and the Middle East that the current reporting period of March and September does not correspond with their business cycle. Reporting for the six-month period ended June and December would be a better fit with market conditions.

The BPA board unanimously agreed to change the newspaper reporting periods in these regions.

Occasional copies/conversion. According to Canadian daily newspaper rules, publishers may serve occasional “bonus” copies and may convert lower frequency subscriptions to higher frequency plans. However, some confusion exists regarding what defines an occasional copy and a conversion copy. Occasional copies were intended to serve as one-off copies to subscribers with less-than-daily frequency. These copies are typically served on civic and statutory holidays, such as Labor Day, Easter Monday, Thanksgiving Monday.

The intent of conversion copies was to allow publishers to serve issues on a daily basis to subscribers of less-than-daily frequency in an attempt to up-sell the subscriber. Conversions to daily service typically apply to weekend-only subscribers or Saturday-only subscribers.

As a point of clarification, the board amended the rule to state occasional copies cannot be served for consecutive days. The board also voted to allow publishers to serve subscribers conversion copies in electronic format rather than print if proper advance notification and an opt-out are provided to the subscriber.

Educational copies. Newspapers served to educational institutions are reported as “Educational” copies under the heading of “Sponsored by Third Party or Free” in paragraph 1.

In the past, these copies were known as “Newspapers In Education” and were included with paid circulation. With the migration to BPA’s new daily newspaper format, these copies are no longer considered paid. In most cases, copies served to educational institutions have either been purchased directly by the institution or sponsored by a third-party. These copies must be supported by the combination of a signed agreement, invoices and proof-of-payment.

In the absence of invoices with supporting proof-of-payment documentation, the board voted to include a provision in the rules requiring publishers to maintain agreements with schools confirming they agree to accept and redistribute a specified number of copies for a defined period of time. Agreements may cover the school year, and exclude periods such as March Break and Christmas vacation. Agreements will help confirm copies were distributed. A similar requirement already exists in the Consumer magazine rules for bulk circulation.

Promotional incentives (premiums). Many daily newspapers offer subscribers promotional incentives as a means to grow subscriptions. Promotional incentives are also referred to as “premiums.”

Newspapers currently report circulation by price point: copies sold at or below 50% of the basic rate; and copies sold above 50% basic rate. The value of the promotional incentive can impact the reporting of copies. Taking this into consideration, the BPA board agreed to a change that subtracts the value of the promotional incentive from the offer price to determine more accurate price point reporting.

Sponsored/Third Party circulation. At its last meeting in December 2008, the BPA board agreed to allow the reporting of individually addressed Canadian newspaper subscriptions purchased in lots of six (6) or more as “Sponsored by Third Party or Free”, while lots of five (5) or fewer are reported as “Paid For By Individual Recipient.”

BPA was made aware of a case in which a corporate franchisor purchases 200 copies on a daily basis with the intent of delivering five copies to each of its 40 retail locations. Since the franchisor serves as a collective buyer for the retail locations, and the retail locations were receiving five copies each for on premise reading by their patrons, the board voted to amend the rule to account for similar situations.

Board Actions Applying to all BPA Applicants

Application forfeiture/withdrawal. Applicants for membership in BPA Worldwide have 12 months to complete their initial audit. BPA rules allow applicants to promote their application during this time. If, for any reason, an application forfeits or withdraws, current policy states that the status of the application will be posted on the BPA website for six months.

After reviewing input from advisory boards around the world, the board voted to amend policy wherein notice of application forfeit or withdrawal will appear on the BPA website for same tenure as the application was posted. For example, if an application is withdrawn after nine months, notice of withdrawal will be posted to the website for the next nine months.